The Impact of Customer Retention on Organization Profitability in the FMCG Sector in Nigeria

Abstract

In the competitive domain of fast-moving consumer goods (FMCG), retaining customers is essential for the overall organisational performance of an FMCG company. This research investigated the impact of customer retention on organisational profitability in the Fast-Moving Consumer Goods (FMCG) sector in Nigeria. The study employed a cross-sectional survey approach, with data collected from 248 employees in 10 different FMCG companies in Oyo State, South West, Nigeria. The findings revealed a strong positive correlation (r=0.783) significant at p < 0.01 between customer retention and organisational profitability, highlighting customer retention as a key driver of sustained profitability. The study further explored specific components of customer retention, including personalised marketing, loyalty programs, quality products, and customer support, all of which showed strong positive associations with organisational profitability. Survey results indicated that customer satisfaction is a leading factor contributing to customer retention, emphasising the importance of understanding and meeting customer expectations. Based on these findings, recommendations are provided for FMCG companies to prioritise customer retention strategies, such as personalised marketing and quality customer support, to enhance organisational profitability and success in the Nigerian FMCG sector.